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FCC speaks on rescuing private media

September 24, 2010

NW law firm FCC Commissioner Baker Suggests No Government Support for Media, But Possible Relaxation of Broadcast Ownership Rules
By David Oxenford
Davis, Wright, Tremaine LLP

FCC Commissioner Meredith Atwell Baker recently delivered a speech in Washington, DC, where she addressed calls for the government to take action to assist the traditional media deal with the economic issues brought about by the new media.  From time to time, there have been calls for the government to assist the traditional media, either through some sort of direct subsidies, or through regulatory changes that could assist in their news coverage to make these entities competitive in the new media world.  While the Commissioner’s speech did not detail those efforts, calls have, for the most part, not suggested direct government subsidies to support traditional news media sources.

Instead, more indirect efforts have been suggested to insure that these media sources continue to serve their communities.  Calls have been made to change tax laws to allow newspapers to operate as nonprofit entities (while still soliciting advertising).  In a draft FTC option paper, there was a suggestion of taxing commercial media to provide more support to noncommercial public broadcasting entities.  Other proposals have been more direct – simply mandating more news and public affairs programming from broadcasters (with little or no discussion of the source of the revenues for such mandates).  In her speech, the Commissioner noted that some suggestions may be forthcoming from the FCC’s own Future of Media report due at the end of the year (see our summary of the issues that they are exploring here), but she seemed to rule out these types of proposals, instead suggesting that the Commission could assist companies meet the new media challenge by loosening FCC restrictions on ownership.

The Commissioner suggested that no government action to bail out the media is necessary to preserve service to the public – citing the many examples of how that service is provided through new media sites that serve all sorts of communities and community groups – providing timely and detailed information on specific topics, often on a neighborhood level.  We have made that same point on these pages – the new media is already filling any void that may exist in local media coverage.  Some of these sites are produced by old media companies – as TV stations, newspapers and others develop microsites targeted to very local needs and interests.  Other sites are totally independent – developed by local interest groups or new media entrepreneurs.  So how can the Commission help these sites to develop?

The Commissioner suggested that a relaxation of the ownership rules, which is currently under consideration (see our post on the pending Notice of Inquiry on the multiple ownership rules), could help existing media companies compete in the new media world.  We’ve written before about the concern that the prohibition against the cross-ownership of broadcast stations and daily newspapers (except in the largest markets where waivers are available, see our post here) might well outlast the newspaper.

But there are other issues to be debated – whether to allow radio broadcasters to own more stations in their markets (to compete with Internet and satellite radio which can both provide hundreds of channels of programming to any market).  And whether to allow television consolidation in smaller markets where economic realities seem to be dictating that independent television stations may not be able to survive.  These efforts will, of course, be subject to debate, as many still react with an almost automatic suspicion of more media consolidation (see our post on the opposition to shared services agreements in the TV world).  These issues, too, should play out in more detail in the coming months, as the FCC releases its Notice of Proposed Rulemaking on reform of the multiple ownership rules, where it will set out in more detail potential changes in the ownership rules that it will seriously consider in its Quadrennial review of these rules.  Watch for more on this proceeding, probably late in the year.

  
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Bob Clark September 24, 2010

Media markets are highly competitive today because of new technologies, and as result, FCC is largely a useless government regulator in search of making itself somehow matter. No good can come from the current leadership of the FCC which really seeks government takeover of media so as to push public opinion in favor of democratic party social welfare state agenda. I think Bama’s administration is even worse than one-term-Carter’s administration. At least, Carter allowed the dissolution of the Civil Aeronautics Board; and with it, deregulated the airline industry.

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